Professional Documents
Culture Documents
Eurobond
Eurobond
to the country where it is issued. Also called external bond; “External bonds
which, strictly, are neither Eurobonds nor foreign bonds would also
include: foreign currency denominated domestic bonds…” Money may be
raised internationally by bond issues and by bank loans. This is done in domestic
as well as international markets. So, the question is – Meaning, Definition,
Types, and Advantages of Eurobonds.
The Concept of Eurobonds explains in Meaning,
Definition, Types, Characteristics, and Advantages.
It can be categorized according to the currency in which it is issued. London is
one of the centers of the Eurobond market, with Luxembourg being the primary
listing center for these instruments. The difference is that in international
markets the money may come in a currency which is different from that
normally used by the borrower. A foreign bond is a bond issued in a particular
country by a foreign borrower. Eurobonds are bonds underwritten and sold in
more than one country.
Meaning and Definition:
A foreign bond may be defined as an international bond sold by a foreign
borrower but denominated in the currency of the country in which it is placed. It
is underwritten and sold by a national underwriting syndicate in the lending
country. Thus, a US company might float a bond issue in the London capital
market, underwritten by a British syndicate and denominated in sterling. The
bond issue would be sold to investors in the UK capital market, where it would
be quoted and traded. Foreign bonds issued outside the USA are called Yankee
bonds, while foreign bonds issued in Japan are called Samurai bonds. Canadian
entities are the major floaters of foreign bonds in the USA.
Types of Eurobonds:
There are three types of bond, of which two are international bonds. A domestic
bond is a bond issued in a country by a resident of that country.